How Kindle Can Still Beat Nook

The latest Barnes & Noble Nook e-reader is getting a lot of positive buzz, and for good reason. It's thin and light, has a touchscreen interface that's easy to navigate, and is priced the same ($139, Wi-Fi) as Amazon's industry-leading Kindle.

What's Amazon to do? Well, in my role as armchair pontificator, I feel compelled to offer Amazon a bit of unsolicited advice. Here are five ways that Amazon can regain the competitive edge in the e-reader race.

But how about an e-Ink reader with a backlight that you can turn on or off? Kindle's E-paper screen is easier to read outdoors than a glossy backlit display--a fact Amazon stressed in a TV ad last year--but it's nearly impossible to read in low-light environments. An optional backlight would be a competitive advantage, even if it makes the Kindle a bit pricier than its competitors.

The newer Kobo eReader Touch Edition is $130, just ten bucks cheaper than a comparable Kindle or Nook. Amazon's next Kindle should break the $100 barrier, an appealing price point that would attract more mainstream users to the platform. It's the classic printers-and-ink business model: Give 'em the hardware at cost, and make money on the content (ebooks, in this case).

3) Combo LCD/E-Ink display: The best of both worlds: A color LCD for Web browsing, gaming, Android apps, and other tablet-like activities; and a black-and-white E-Ink display for reading e-books in sunlight. A recent report says Apple may be working on exactly this type of hybrid display technology. Perhaps Amazon could beat Steve Jobs to market.

4) Better controls: Amazon is going to have to ditch the Kindle's physical keyboard, which makes the e-reader look clunky and outdated, despite its advantages for serious note-takers. The latest Kobo and Nook readers have touchscreen keyboards.

5) Generous lending policies: The Kindle Lending Library arrives later this year. It will allow customers to borrow Kindle books from more than 11,000 U.S. libraries.

Amazon has yet to announce many specifics of the service, however. What advantages could the Lending Library provide that would give Amazon an advantage?